Illinois Looks to Increase State Tax on Cigarettes

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Illinois Looks to Increase State Tax on Cigarettes

By Hank Behar - 10/13/2009
NEW YORK -- Illinois Governor Pat Quinn is seeking to increase the state's tax on cigarettes by $1 per pack to $1.98. That increase, if passed by the state legislature, would catapult Illinois from its current rank of 30th to the 16th highest cigarette tax state in the nation, edging out New Hampshire where the tax is $1.78 per pack.

The lowest state tax is Missouri's at 17 cents a pack, and the highest is Rhode Island's at $3.46. The overall average among the 50 states is $1.34.

The governor plans to renew his push for the $1 increase at the veto session scheduled to convene Oct. 14. Veto sessions traditionally are when legislators take up bills the governor vetoed during the summer break, but they're often used to consider new legislation as well. The tax increase isn't exactly new, since it was passed by the Senate in May of this year, but failed to get a vote in the House. That's not stopping the governor, who claimed the $365 million generated by the tax is sorely needed to bolster the state's Monetary Award Program (MAP) for Illinois college students, which is scheduled to run out of funds in January.

Commenting on the governor's plan, Bill Fleischli, executive vice president of the Illinois Petroleum Marketers Association/Illinois Association of Convenience Stores (IPMA-IACS) noted: "A study conducted earlier this year by Illinois State University for the IPMA-IACS found there was actually a drop-off in tax revenues not long after the past five tax increases were enacted.

"Not only will the expected revenues not be realized," said Fleischli, "but smokers will travel to nearby lower-tax states to buy cigarettes, hurting Illinois retailers and their employees. This is no time to boost taxes, and we will fight to keep the tax from being enacted," he said.

One bright note is the Governor's position on the proposed 50 percent income tax increase from 3 percent to 4.5 percent. He won't bring it up until 2010.

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